Life cycle assessment and life cycle cost analysis are suitable tools in trying to minimize environmental impact and cost. To get reliable results it is crucial to set up correct system boundaries for the investigation, but it is often difficult to understand a complex products system because of the cascade effects of consequences that can be induced even by small changes. In this paper the effects and consequences evaluation (ECE) method is introduced to systematically identify and organize the effects and consequences for a design change of parts of a complex system. The method is applied in a case study of external wall insulation for a new building to investigate the importance of correct system boundaries. Using the methodical approach in identifying all significant consequences showed that unexpected unit processes can be important when deciding on the relevant system boundary. We also conclude that such processes can have a significant impact on the final results by calculating the change in global warming potential and life cycle cost for the processes affected by the design option.